Tuesday, October 18, 2005

Tues - Are mobile phone operators to become media companies

Today 3UK, the UK's fifth largest mobile phone operator has come out of the closet stating that they are leading the charge to become the first mobile media company. 3UK is one of the more important operating companies in Hutchison's 3G telecoms empire of broadband mobile phone networks. And Hutchison has made a big bet on this global 3G network spending $25bn on it to date.

Many mobile industry experts in Europe have spent the last few years knocking 3's ability to be successful. Now, with 3Italy and 3UK preparing for their lucrative IPO's, they must all be eating some painful humble pie. So, the fact that 3UK, with a decent sized subscriber base of 3.2M now talks about being a new kind of mobile operator, focussed on convergence between telecomms and media, should get all the pundits yapping again.

Personally I always thought 3 was an interesting concept. To be the first international mobile operator to launch next generation 3G broadband networks ahead of anyone else was a bold and dangerous move. But, they seem to have largely pulled it off and built a strong and innovative brand in the process.

That they now proclaim that they are the first mobile media network is bold again and potentially allows them to shift the battleground going forwards as their technological lead in 3G is narrowed. Lets face it, this Xmas sees most major operators in the West and Europe in particular take 3G services seriously.

So, can 3UK be right? Will the leading mobile operator of tomorrow be part telco and part media company? I think so. You see, unlike fixed line telco's, the mobile operators run proprietary, closed networks. So, they actually behave more like a cable company than a traditional telco. They own the customer, the billing relationship and the pipe.

So, as cable companies have recognised that content is king and are pouring money into creating their own content, so will the mobile operator, particularly as mobile content has quite different requirements to other channels and mediums.

I believe that a good role model for mobile operators to follow is yahoo. They are one of the best companies in the world at really doing new media. They combine technology excellence with media savvy in an enviable, market beating way. They started by focussing on offering other companies content in the most efficient and comprehensive manner and now they are moving up the chain to generate their own content. Both that created by Yahoo and that created by their millions and millions of users.

So, yes, I think 3UK are making an important announcement. I believe that the most successful mobile operators of tomorrow will be part media company and as a result their branding will be critical. Good on 3, the perennial upstart, to keep pushing the mobile phone industry. They deserve continued success.